Are certified financial planners happier and do they earn more? The CFP Board certainly thinks so.
Research carried out by the professional body for financial planners in the US, which is affiliated with the global CFP Board of Standards, recently found financial planners with CFP designation enjoyed higher earnings and greater career satisfaction than those without.
Speaking to 1,455 financial planners earlier this year it found certified professionals earned 10 per cent more than other planners in the US, at a median $192,000 (£144,000) total compensation a year, and reported high levels of satisfaction with stability, work/life balance, career advancement and compensation.
This was after accounting for factors like job experience and company size. In fact, experience played a crucial role for the total pay financial planners received, with those with more than 20 years of work experience enjoying a median compensation of $325,000.
A considerable 85 per cent of CFP professionals said they experienced personal fulfilment in their careers and nine in 10 CFPs planned to stay with their current employer for at least the next two years.
According to CFP Board CEO Kevin R. Keller this came as "no surprise". "The findings in the 2024 Compensation Study show that a career in financial planning is quite possibly the best job ever,” he said.
The CFP Board acts as the standard setter for CFP professionals worldwide, including those who attain the designation from the Chartered Institute for Securities & Investment in the UK.
But what drives UK based advisers to become certified? And do they believe they earn more?
A higher level
"There is a monetary benefit but not because you hold the qualification," said Philip Dragoumis, director and owner of Thera Wealth Management.
"Clients are often confused with the various designations and rarely do they seek out a CFP or a chartered financial planner," he said.
"The CFP exams and coursework are the best and only way for advisers to learn how to construct a complex, rigorously tested financial plan or model for their clients.
"Once you learn this skill, your whole proposition reaches a far higher level than your competition. This will lead to happier clients and more referrals and higher revenues."
Financial planners in the UK typically choose between attaining the CFP or the chartered status, though many hold both. CFP in the UK is at Level 7, which is the highest-level financial planning qualification.
"For me, the distinction between the two is that the CII chartered route covers the technical knowledge needed to be a financial planner and the CFP is more about putting your knowledge into practice and demonstrating that you know how to apply the financial planning process in full, and correctly to meet a client’s objectives," said Carly Denningham, director of Financial Planning Verso Wealth Management, who holds both.
